Dubai: UAE stocks ended the week in negative territory, losing more than Dh100 billion of their value in five days, led by a massive pounding in real estate and bank and mortgage companies' shares.
Emaar Properties, which tumbled to a four-year low to close at Dh3.18, dragged the Dubai Financial Market benchmark 4.91 per cent lower to 2,106.14. The DFM index lost 29 per cent in the past six trading days.
Tamweel and Amlak Finance, the two mortgage giants, which are in talks for a merger, suffered heavily losing 9.52 per cent to Dh1.14 and 9.68 per cent to Dh1.12 respectively. Emirates NBD, the largest bank by assets in the UAE, fell 4.94 per cent to Dh4.43 and Dubai Islamic Bank slid 8.77 per cent to Dh2.60.
The Abu Dhabi Securities Exchange fell 1.48 per cent to 2,765.07. The six-day toll was 21.25 per cent. It has lost 39 per cent since the beginning of the year.
With UAE leading the region - DFM sliding more than 64 per cent this year - in the current slump of the market, it has been increasingly felt that it is more than just the usual reasons: a slowdown in real estate, a difficult credit situation, falling oil prices and an imminent global recession.
Traders feel that if suitable levels of transparency had been maintained about the problems brewing in the different sectors, as and when they started facing them, it would not have fallen to such lows.
There is now a lack of trust and investors really don't know whether the statements coming out of companies are really a fact, some traders said.
"There is no disclosure about what problems we have here," said Mousa Haddad, head of trade, discretionary mandate, National Bank of Abu Dhabi. "If we had disclosed right at the beginning that there is a problem, then we would not be in today's position.
"The US accepted there was a problem, they were badly hit, announced it to the world and today, there are signs that the market is slowly stabilising. And so here, when the markets are weak, rumours grip investors and no one is allaying these rumours."
While some companies have confirmed retrenching their staff, rumours are doing the rounds of large lay-offs in some of the biggest real estate companies and investment banks. Sales agents and brokers have confirmed about more than 40 per cent declines in property prices in some areas such as Palm Jumeirah and about 22 per cent in downtown Burj Dubai.
An HSBC report issued on Wednesday said prices fell four per cent in Dubai and five per cent in Abu Dhabi in October.
Emirates NBD denied a Gulf News report, which the newspaper stands by, that the bank has stopped lending to expatriates at a certain select number of real estate companies. Also, reports have been circulating of hundreds of billions of dollars the sovereign funds have lost in their investments abroad.
Yesterday trading at the Kuwait Stock Exchange was halted by court order.
